Following the acquisition of Providenica and Fiberweb, net sales at Polymer Group, Inc. (PGI) zoomed 50.9% from $439.9 million for the second fiscal quarter ending June 28, 2014 compared with $291.5 million for the second fiscal quarter of 2013.
PGI said the increase in net sales was primarily driven by an increase in overall volumes as well as favorable foreign currency impacts of $3.8 million. Net sales in Asia increased 8.8%, driven by a strong healthcare market as well as incremental volume from its new hygiene manufacturing line.Following the acquisition of Providenica and Fiberweb, net sales at Polymer Group, Inc. (PGI) zoomed 50.9% from $439.9 million for the second fiscal #
In addition, net sales in the Americas and Europe increased 47.7% and 91.2%, respectively, as incremental sales from both Fiberweb and Providencia, as well as continued contribution from its new spunmelt line in Waynesboro, Va., helped mitigate lower net selling prices and product mix in Europe and Asia, it added.
Gross profit for Q2FY15 rose by $35.5 million year-on-year to $85.9 million. As a result, gross profit as a percentage of net sales for Q2FY15 increased to 19.5% from 17.3% for Q2FY14. The increase in gross profit was primarily driven by volume increases in Asia and Europe, these increases more than offset slight volume reductions in the Americas, PGI said.
Selling, general and administrative (SG&A) expenses for Q2FY15 were $65.4 million, up $26.0 million from Q2FY14, result of inclusion of Fiberweb, which added an incremental $20.2 million of costs for the period and the acquisition of Providencia added $7.7 million to SG&A expenses.
Excluding these additions, all other SG&A expenses were lower by $1.9 million compared to the second quarter of 2013. As a result, selling, general and administrative expenses as a percentage of net sales increased to 14.9% for Q2FY15 from 13.5% for Q2FY14.
Special charges in Q2FY15 were $24.3 million, which included $12.4 million related to professional fees and other transaction costs associated with acquisition of Providencia. In addition, PGI incurred $7.3 million of restructuring and plant realignment activities primarily associated with the Fiberweb acquisition.
PGI reported an operating loss of $7.6 million in Q2FY15 compared with operating income of $8.3 million in Q2FY14. PGI attributed the fall in operating income to higher special charges and the impact of purchase accounting adjustments associated with the acquisition of Fiberweb and Providencia.
As a result, net loss shot up to $21.6 million in Q1FY15 compared with a net loss of $7.9 million for Q1FY14. Adjusted EBITDA for Q2FY15 was $55.3 million compared with $34.7 million for Q2FY14.
"Our second quarter results represent a major milestone for PGI. We delivered record sales and Adjusted EBITDA in the second quarter as a result of growth in both our base business and strategic acquisitions”, said PGI's CEO, Joel Hackney.
Fibre2fashion News Desk - India
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